Mortgage application volume was generally lower during the week ended January 27.  The Mortgage Bankers Association said its Market Composite Index, a measure of application volume, was down 3.2 percent from the week ended January 20 and up 11 percent on an unadjusted basis, 

The Refinance Index decreased by 1 percent and the refinance share of total activity slipped to 49.4 percent from 50.0 percent.  It was the first time refinancing had garnered less than a half-share of the week's applications since July 2015.  

The seasonally adjusted Purchase Index, after gaining 6 percent the previous week to reach its highest level since last summer, dropped back by 6 percent.  The unadjusted index was up 12 percent week-over-week and was 2 percent higher than the same week in 2016.  For the fifth week in a row the MBA results included an adjustment to account for a holiday, this time for the Martin Luther King Day.

Refi Index vs 30yr Fixed

Purchase Index vs 30yr Fixed

The FHA share of total applications fell to 12.1 percent from 13.6 percent the week before while the VA share rose to 12.4 percent from 12.2 percent. The USDA share was unchanged at 0.9 percent.  

Apart from FHA loans, average contract and effective interest rates were higher during the week.  The average contract rate for 30-year fixed-rate mortgages (FRM) backed by FHA was 4.17 percent, down from 4.19 percent.  Points were unchanged at 0.35, and the effective rate was lower.

The average contract interest rate for 30-year FRM with conforming loan balances ($424,000 or less) increased to its highest level thus far in 2017, 4.39 percent, 4 basis point higher than the previous week.  Points increased to 0.34 from 0.30.  

The rate for jumbo 30-year FRM (balances greater than $424,000) was 4.32 percent compared to 4.28 percent the week before. Points increased to 0.34 from 0.31.  

The average rate for 15-year FRM was 3.61 percent with 0.33 point.  The prior week the rate was 3.57 percent with 0.28 point.

Applications for adjustable rate mortgages (ARMS) jumped from a 5.7 percent share to 6.4 percent.  The average contract interest rate for 5/1 ARMs eased to 3.33 percent from 3.41 percent, with points decreasing to 0.22 from 0.30.  The effective rate was lower than a week earlier.

The MBA Weekly Mortgage Applications Survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100 and interest rate data is based on mortgages with a loan-to-value ratio of 80 percent and points that include the origination fee.